A couple of months ago, we analyzed in detail how to compose . look at 6 simple steps, after which you can describe your goals in detail, allocate money for them, and even find out exactly when your desires are realized.
If you have completed these steps or are just about to take on your LFP (personal financial plan), you are faced with the question - how to compose it quickly and functionally.
You will no longer worry about the question: where to get the money? You will be wondering: Where to write even more goals? How to make the budget accessible to everyone in the family? Where to enter interest on investment? And in general, how to connect all this so that it is convenient and understandable? 🙂
You can make a LFP template yourself, use the formulas that are convenient for you. Or you can download my template. Use it as is or customize it according to your needs. Get creative, it's your money!
Since the template is stored in my Google Drive, you cannot change it. To use the LFP table, copy it to yourself. To do this, go to link and select "File" - "Make a copy" (or "File" - "Make a copy") from the menu.
Now let's look at all the tabs in detail and I will describe how to use the table.
Page One - GOALS
Of course, at the very beginning we have GOALS. This is done so that in the first place we see the desires for which we work!
Enter goals, consider how long it will take you to achieve them. How to enter goals correctly, as well as how to correctly calculate the time to achieve is described in detail in the article: “ ". Look at the article, in it you will find useful life hacks on what to do if the desire is delayed or vice versa, it is completed faster.
In the “Income” cell, enter your monthly income, in the currency in which you receive it. I have rubles everywhere by default.
We turn to the second page of the Template and see a sheet that often discourages people -
Page Two - PLANNING THE EXPENSES
Only at first glance it seems that everything is complicated. But no, everything is simple and the table will count everything by itself 😉
Numbering: the first column, where percentages are shown at the bottom. I don't use numbering in the categories to be able to rearrange them as I see fit. But I put down percentages on desires and goals. It’s more convenient to navigate if the percentage for goals is different.
Monthly expenses: the categories of expenses you spend or save. Now the categories are by definition from the article , but you can change them.
Plan: planning your expenses. How to plan so that everything is enough is described in the article.
Fact: here the formula calculates the average value for all months.
Dates: now the table starts from November, 2017.
How to use:
Enter the income for the month in the cell below the date. In the first month, the formula is not worth it, but then be careful. You must enter the amount of income not in the cell itself, but in the line with the formula. Look at an example.
Now I have set an income of 34,000 rubles. And you, instead of the blue number, enter your income for the last month.
Fill in the lines with expenses. And in the last line you will seeremainder, which you have left for a month
It is automatically carried over to the next month and added to income.
Third page - ASSETS AND LIABILITIES
We turn to the third and last tab of our table - Assets and Liabilities.
Assets- the money that brings us more money. Bank deposits, profitable investments, securities, apartment for rent, etc. I filled in the line with one bank deposit so that you can see an example.
Enter the deposit amount, if any. Then enter the percentage and the table will automatically calculate the annual income for you.
Liabilities- the opposite part of your money to the asset. Here enter the currency (in rubles) in cash, real estate, car, savings that are stored at home, etc.
Total- the sum of assets and liabilities. That is the amount you own.
Life hacks for using a spreadsheet
Get creative! Set the design in your favorite colors, use google emoticons to label your categories. Bring your personality to the table and you will notice how you start using it with pleasure.
If you want to update the template usefunctions and formulas Google spreadsheets. Simplify your life and do not calculate everything manually!
If you did everything right, then you will not have a question: How to plan a budget? In just one evening, you will understand what, how much and where to put aside in order to achieve your financial goals.
Also, I have a recorded webinar on creating a Personal Financial Plan. In it, I tell personal life hacks, the experience of students and, of course, I give an updated LFP table. You can join the webinar at any time. Sign up via the link.
Most importantly, don't delay!
And that is not all! Do you want to participate in free trainings in finance and earnings marathons? Then subscribe to my Instagram. There, among other things, I tell and show how I achieve my goals with the help of a Personal Financial Plan and crazy motivation. IN join our Success Club and know that you will succeed!
But through the budget of each person for the working period of life are decent amounts. Say, with a monthly income of 40,000 rubles for 40 years of work, a person will receive 19,200,000 rubles. The amount is more than impressive, but in fact this money is enough only for living. And for a normal life, you need an apartment, a car (better - for each family member), funds for the education of children, and so on. Therefore, the specified amount must be maximized. How to do it correctly? How to make money work to achieve your goals, not someone else's? The answer is simple: you need to create a personal financial plan. What is needed for this - we will tell in our article.
How to draw up a financial plan: stages
All dreams are realizable. The main thing is to act correctly: to move towards the fulfillment of desire, clearly following the previously drawn up schemes. But how do you develop a financial plan? Let's talk step by step.
Setting goals
The first stage is to determine for yourself what exactly you want to achieve and in what time frame. The goal can be almost anything - an apartment, a house, a car, the education of children, passive income, travel, caring for loved ones and so on. Desires can be very different, but each of them has its own cost equivalent.
Further, in order to properly draw up a financial plan, you should prioritize depending on the significance of desire. For example, if you are renting a rental property, then buying a property will be a priority. The priorities should be divided into A, B and C:
A - what should be achieved in any case;
. B - necessary;
. S is desired.
At this stage, you need to identify the total cost of your desires, as well as look again into yourself and think about whether they really have value for you.
Tab. 1. Objectives by priority and their financial equivalents
Determination of the origin
The second step for those who decide to build a financial plan is to determine their own current financial situation. The fact is that many people answer such a simple question completely wrong. It is necessary to draw up on a sheet of paper (or in Excel) a table divided into two groups: assets and liabilities. Assets are what bring you money. Liabilities are things that spend your money. It is necessary to clearly understand what in your case is an asset and what is a liability.
If you have a car, then it can be both an asset and a liability. If you spend money on its maintenance, fuel, etc., using the car only for personal purposes, it is a liability. If a car helps you make money, it's an asset. The same is true with real estate. If you have a house in the countryside, which you hardly ever visit, but pay taxes for it, then this is a liability. And if at the same time you rent it out for the summer months, then it is an asset. If you don’t have a car and real estate, your salary is an asset.
Liabilities are cost items. These are loans, debts, spending on household needs (clothes, food, entertainment, etc.).
Tab. 2. Assets and liabilities
Optimization of assets and liabilities
Looking at the resulting table, you can immediately find that small expenses are visits to a cafe, spontaneous purchases and entertainment - they take away a certain part of the income that could be spent more rationally.
Also, according to the table, you can take a look at your own assets and liabilities from the outside. And to understand whether there is an option to turn one into another - let's say, to rent a house in the country for the summer.
At the stage of compiling the table, it will become clear where the money goes. In addition, the most priority items of their income (work, part-time work, business) will become clear. For example, if a part-time job brings in more money than the main activity, you should consider whether it is worth spending most of your working time in such an inefficient way. After a few hours of thinking, you will understand how to spend and receive funds more rationally. Having correctly drawn up such a financial plan, you can optimize your spending. The main goal of this stage is to create a surplus in your budget.
Tab. 3. Optimization of assets and liabilities
Microplane
At this stage, it is worth systematizing your spending. For example, if you, trying to save money, deny yourself new clothes for a month or two, and then go and buy all this in season at an inflated price, this is the wrong approach. You need to clearly understand when and what to buy. It is also worth considering whether it is possible to optimize food costs, for example, by purchasing products from a wholesale base, and so on.
It may seem that such an approach will doom you to count every penny. But this is far from true. You must clearly understand: rest is needed, and money will be spent on it. It is only important to systematize this process (for example, to have fun once every two weeks for a certain amount). It is impossible to cross out important items of expenditure, because they can return a hundredfold - in the form of unplanned expenses.
Get into the habit of keeping a financial diary, recording daily expenses in it. This can be done both on paper and in a special home accounting program that can be downloaded from the Internet. It is not necessary to write down in a diary every purchased bun. Record expenses according to the following principle: date, receipts (salary, part-time work), expenses for food, fuel, shopping.
After some time, a picture of your financial flows will begin to emerge in your head, and you will be able to see how a financial surplus will form. The purpose of this stage is to streamline your spending, since most of them are unplanned.
Tab. 4. Example of a daily financial diary
The biggest secret
The main secret of any financial plan is based on the principle of "pay yourself first." It is necessary to set aside 10% of your financial income in a financial egg. But not just under the mattress - you need to make the funds work, producing even more money. Everyone knows the fantastic effect of compounded interest, which shows a multiple increase Money. The bottom line is that if from a salary of 40,000 rubles. to save 4,000 rubles a month, even at 10%, then in 40 years an amount of about 22.3 million rubles will be accumulated, which is quite enough to fulfill the above desires.
But if we talk about long time investment intervals, then you need to have a lot of investment strategies and combine them correctly. Investments can be divided into conservative, moderate and aggressive. It is also necessary to be able to take into account the general economic situation in the world. And this requires constant improvement of overall financial literacy.
Conservative investments
Money is invested in deposits of reliable banks, various pension and insurance products. It is very good to dilute these assets with exchange-traded bonds, as they reduce risk. The fact is that when investing in a bank deposit, you accept the risks of the banking sector, which can sometimes be very high (for example, during the period of selection of banking licenses). In fact, bonds are the same deposits, only from various sectors of the economy, issued by various companies at a fixed income (often a little higher than the average deposit). It is very convenient to invest money in bonds every month. It is important that in the process of such an investment, you unwittingly plunge into the world of finance and learn to better understand the general economic trends.
Rice. 1. Chart of the corporate bond index
Moderate investment
Approximately half of the portfolio of moderate investments consists of deposits, bonds, pension and insurance products. The other half are:
Investments in units of investment funds - when you receive a share of the fund's portfolio, which professionally manages the money of investors;
. trust management - when part of your funds is managed by professionals according to a pre-selected strategy that generates income over a long period of time;
. investments in the shares of the most reliable companies paying dividends, on the recommendation of professional consultants. Thus, you maximize the potential profitability and at the same time learn to understand the way of thinking of financial market professionals.
The acquisition of real estate can also be attributed to moderate investments. But this is not a conservative way: as practice shows, real estate can also become cheaper, and buying it at the “excavation” stage is even more risky.
Rice. 2. Chart of the MICEX index
Aggressive investments
Having gained experience and knowledge in the field of finance, you will be able to independently invest in stocks of fast-growing companies, periodically short sell (make money on a decrease in the market value of assets) and invest in instruments that contain high profit potential.
In the future, you will be able to vary these investment styles depending on economic conditions and increasing experience.
Rice. 3. Sberbank stock chart
Stage of formation of earning assets
The last thing you need to do for those who decide to create a personal financial plan is to try to make sure that desires are realized at the expense of existing assets. For example, you can not buy a ready-made car, but create an investment portfolio that can generate income that can provide payments on a car loan over a period of time. After a while, the loan will be repaid, and the earning portfolio will remain. And continue to generate income.
Conclusion
It must be remembered that all goals are achievable with a properly formed strategy. A ship can be powerful and large, but if it is not sailing on the map, it risks staying in the same place. The most important thing in the process of achieving any goal is to start, continue and not stop.
Your personal assistant in achieving the maximum return on investment is Otkritie Broker. We will help not only develop a financial plan correctly, but also “pump” on many other topics. Register on our portal to start learning right now!
On a daily basis, a person is faced with making financial decisions.
A personal financial plan (PFP) is needed to minimize mistakes, as well as to achieve your goals as a result.
When deciding how to spend their money, a person acts based on the situation, often under the influence of emotions.
He assesses current needs, makes monthly payments, incurs planned and unplanned expenses, and also takes care of funds that will be needed in the future.
There are many such solutions, for example:
- purchase of goods, services;
- investing in financial instruments;
- loan processing.
In addition to everyday worries, a person thinks about how to set a financial goal, For example:
- buy a car, an apartment;
- pay for tuition;
- organize a wedding.
Exist two main ways achievement of the financial goal, namely:
- , to achieve goals quickly, or
- use financial instruments with the help of which the delivered goal will be achieved in the future.
In both cases, a person has to manage their personal finances.
Financial Management Approaches
Allocate two main approaches:
- spontaneous;
- planned.
In this case, he acts without a plan and a system.
So, a person can make an investment in a business only because his neighbor does it, although in the end it will turn out to be uninteresting, unprofitable and unprofitable for him. Or he, because a colleague took him and advised him, without taking into account the large expenses in the near future.
The result of such actions may be the impossibility of repaying the loan.
An example from life. A man was going to buy a car in 2 years, to buy a house in 4 years, but he did not provide for the costs of his son's education, which will be needed in 7 years.
The man successfully saved up for a car, but transportation costs increased, which did not allow him to collect a down payment on a loan for an apartment.
As a result, a person bought an apartment smaller than he wanted and without a down payment, since he simply did not have enough money for more.
Due to the very large loan payments, the person could not save for his son's education at the desired university. And if at the time of the son's admission, education is paid, then he will not be able to get an education.
Conclusion: the person misunderstood investment terms, so there was such an unpleasant situation. If he took into account all investment goals, he would correctly place his savings in investment instruments, or he could save up for an apartment, and he would take a car on credit. In other words, the person has not analyzed in which case it would be better to take a loan, and when it is more expedient to save money.
Mistakes with a spontaneous approach
Allocate three main mistakes and, which are allowed by people who do not have a clear plan:
- wrong goal setting;
- imprecise estimate current situation and its development in the future;
- wrong selection of performance tools.
Therefore, with an incorrectly defined financial situation, goals and instruments, the possibility of achieving such a goal is zero.
Therefore, it is better to act not spontaneously, but in accordance with the financial plan.
What is a personal financial plan?
Personal financial plan (PFP) is a strategy for achieving financial goals using the most effective financial instruments in the current situation.
Here is another definition.
LFP is a person's business plan that is needed to achieve financial goals with the least effort and using the most effective tools.
There are no standards for writing a personal business plan, but, nevertheless, it is worth including the following sections in it.
- Income and expenses. In this part of the plan, the composition and structure of income and family are considered, preferably item by item.
- Assets and liabilities. This part of the plan looks at the family's assets and savings (real estate, etc.), as well as existing loans.
- Risk protection. It involves an analysis of the protection of a person and his family from various adverse future events that may become an obstacle to achieving financial goals: damage and loss of property, damage to third parties and their property, disability, illness, etc.
- financial goals. This section of the plan describes all the goals that the family wants to achieve, their time frame and approximate cost. For example, it could be buying an apartment in 2 years, buying a yacht in a year, expanding own business and even the birth of a child.
- Plan calculation. This section contains a list of actions by years, a table with calculations for the entire period, and, if desired, an accumulation schedule for the entire billing period.
Everything in the world is changing very quickly, and at the same time, the situation in the family is also changing. As a result, and The family's financial plan needs to be changed. It needs to be reviewed at least once a year. Desirable personal plan adjust as the situation changes. So, for example, during a crisis, the plan may be reviewed quarterly.
By making a plan, a person can determine whether his goals are achievable and what needs to be done to achieve them.
Such a financial plan does not give a 100% guarantee of achieving the goals, since it is impossible to predict everything:
- income in the future;
- inflation rate;
- unexpected expenses and other factors.
But the existing plan will allow you to quickly respond and correct actions when the situation changes.
Goal Achievement Strategy
LFP is compiled for one year, and preferably for several years in advance. Ideally, such a plan is drawn up as long as the person has financial goals. The due date may be subject to change. An example of compilation and a sample in excel can be downloaded from the link.
You can make LFP both for yourself and for the family as a whole. to manage all family finances. Do not forget that any financial plan must be adjusted depending on changes in family income and expenses.
Summing up, we recall that there are two main approaches to financial management - spontaneous and planned.
With the first approach, there is almost zero favorable outcome. A person does not clearly imagine the financial situation, therefore he sets the wrong financial goals and chooses the wrong tools to influence them.
With a planned approach a person analyzes income, savings, loans in detail and builds detailed plan to achieve the set financial goals, while selecting suitable financial instruments .
Additionally, check out a short video on how to create a personal financial plan:
Greetings! I noticed that personal finance management is becoming a mega-popular trend in Russia.
Increasingly, people are turning to professionals for financial advice. Maintain records of household income and expenses. Invest money in something. But many are sorely lacking in consistency!
And today we will talk about what a personal financial plan is, and how to correctly compose it.
LFP disciplines, motivates and helps to achieve goals. This is the very first step to!
A financial plan can be compared to a detailed travel itinerary. There is a start and end point of the path. There are intermediate landmarks and time constraints. There are helper tools (compass, map, navigator). And the route itself from time to time will have to be adjusted to the current situation.
Do not like the comparison with the route sheet? Another good analogy is a weight loss chart.
There are two ways to lose extra pounds.
- Start running in the morning. For two weeks, eat germinated wheat sprouts, drinking them with pure spring water. Lose 3 kg. Be happy. Celebrate this business with pizza with sausage and a liter of beer. Berate yourself for being weak. Sleep through your morning workout. Little by little back to habitual way life. Gain 5 kg in a week
- Seek professional help from the very beginning. Think over a complex of trainings and a balanced diet. Lose 10 kg in a year and maintain that weight all the time. Stay healthy, balanced and self-confident after losing weight
People in a panic run for advice to the “money specialist”. And for some time follow his recommendations. And then the situation in the market levels off. And the financial plan "moves" as unnecessary.
A few years later, the situation repeats itself.
What is a good adviser? Competent specialist:
- Objectively assess the current financial situation and your opportunities (income-expenses, assets-liabilities). Even at this stage, you will learn a lot about your personal finances.
- Highlight strengths and weaknesses.
- Adjusts financial goals in terms of their reality and achievability.
- Will prescribe a clear step-by-step algorithm for achieving.
- Describe several possible scenarios for the future.
- He will select the right instruments taking into account the specifics of the client (income level, risk appetite, investment period, etc.).
All this, of course, you can do yourself. But, most likely, due to inexperience, you will make a lot of mistakes and lose a lot of money and time. For example, I did it myself, but after I was checked by a consultant.
Option number 2. On your own
However, no one bothers you to independently work out the “materiel” and draw up a financial plan yourself.
Hint options:
Books
Educational materials on the Web - the sea. Almost all of them can be downloaded for free in fb2 or epub format.
- Vladimir Savenok “How to compose LFP. The Path to Financial Independence. The author literally "on the fingers" tells what, how and why. Savenok even leads at the end excel sample as an example to fill. Another huge plus of the book is that it is based on the author's experience with Russian clients!
- Another one great book: Andrey Paranich “LPP. Compilation Instructions. But I must say right away that just reading such books is not enough! Useful recommendations should be put into practice as soon as possible.
Educational "live" format (webinars, open lessons, trainings, courses)
During the course, you will work through a lot of useful things: from personal finance planning and time management to business relationships and loans with investments.
Stages of compiling LFP
How to make LFP on your own? As usual - "eat the elephant in pieces."
Here is my short guide to step-by-step self-compilation of a financial plan.
First stage. We formulate financial goals
I am sure that this phrase causes a gag reflex in many. But without goal setting, alas, can not do. In order not to be scattered on global or secondary goals, answer three questions first:
- What monthly income do you want to receive in the future?
- At what age do you plan to retire?
- What tasks need to be solved within the next 5-10 years?
I promise it will clear my head a bit. And you can prioritize everything.
Second phase. Assessing the value of your goals
An example of the distribution of funds among different assets:
- 20% off purchase financial instruments to create an additional source of income (stocks, bonds, mutual funds)
- 25% in real estate
- 25% in pension savings
- 20% to own business
- 10% to the bank on the account and deposits
Sixth stage. Creating an airbag
Before embarking on active investments, you need to “insure”. The road ahead is long and difficult. And during this time, anything can happen. will not let you retreat from LFP even in the most difficult periods! A little lower I will briefly analyze so that you understand that free cheese only happens in a mousetrap.
How to implement LFP taking into account force majeure? Consider risk management from the very beginning!
It includes four items:
- Insurance
- Creation of a reserve
- Risk diversification
- Liquidity care
Insurance
To be honest, I am opposed to insuring "everything against everything." In Russia, the institution of insurance is expensive and not always honest. But at a minimum, it is worth insuring the life and health of the main breadwinner of the family. And expensive property (apartment, house, car).
financial reserve
Frequently asked questions and life hacks
In what electronic program to make LFP?
LFP can be easily compiled in the good old Microsoft Excel or Google Doc (for access from different gadgets). And you can use special software.
I also advise you to download budgeting applications to your phone or computer - they greatly simplify life and automate the accounting of income and expenses. Good reviews, for example, about Home Bookkeeping and EasyFinance. I am using CoinKeeper.
What information is needed to compile the LFP?
At a minimum, the figure of monthly income and expenses divided into categories. Before you draw up a document, you need to clearly keep home accounting for at least 2-3 months.
What is more important: cutting costs or increasing income?
Theoretically, both are important. But as practice shows, the total economy regime is incompatible with the thinking of a wealthy person. Achieving monetary goals, denying yourself the most necessary for years, is not the best way.
Current income should be enough to maintain a comfortable standard of living (everyone has their own)! Plus, there should still be something left for the stash, insurance and investments.
Hence the conclusion: it is possible and necessary to optimize costs. But the main focus should be on increasing income: active and passive. Constantly ask yourself the question: where and on what can I earn extra money?
TOP 9 mistakes in LFP development
Fuzzy financial goals
The blurring of goals is the leader of the conditional hit parade of mistakes in the personal financial plan. It is very important to form them as specifically as possible: with amounts and terms.
Just in case: "become rich", "get rid of debt" and "achieve financial freedom" - but sweet dreams.
Excessive optimism in assessing one's own capabilities
Do not set yourself too ambitious and obviously impossible goals. Especially in the short and medium term.
Such Napoleonic plans are doomed to failure from the outset. You should not once again convince yourself that "this nonsense does not work" or "I'm a complete loser."
Excessive pessimism when setting goals
Underestimation always leads to a delay in the achievement of goals. This is not as scary as overestimation, but it also greatly weakens motivation.
Financial goals, deadlines and ways to achieve them should be realistic and a little difficult for you personally. Agree, “earning 100 rubles a day” is more than a real task. But do we need such a small goal?
Alien targets
Why financial advisers do not welcome "amateur" in the preparation of LFP? Not only because they lose income from their paid consultations. Most often, Russians draw up a plan based on ready-made examples from books and publications. Why is it dangerous?
The LFP of a Russian is fundamentally different from the LFP of an American or a German. The plan of a Muscovite is from the plan of a resident of Ryazan or New Vasilki. LFP of a single employee - from a LFP of a private entrepreneur with a wife and three children.
Well, and besides, it’s not a fact that someone else’s financial goal will suit you in principle. The plan, first of all, is developed for yourself!
Force majeure expenses are not taken into account in LFP
The life of each of us is full of surprises and surprises. 90% of them give an additional burden on the family budget. And it is worth taking into account force majeure costs even when compiling the LFP. Be sure to save up a stash for a rainy day.
Yes, yes, I'm talking about a stash, which for some reason many do not consider as a "must have" thing. With it, you will feel much more comfortable, and if force majeure does happen, you will be ready for this both economically and psychologically.
The plan does not include an increase in daily expenses
Statistics show that as we age, we spend more and more on household chores. An apartment, a car, having children, helping elderly parents and grown children, spending on their own health.
But even if for 20 years you buy the same thing every month, the level of spending will be . Therefore, when compiling the LFP, we assume an increase in current costs by at least 10% annually.
Calculation for passive income
is the dream of every investor. But you can afford a comfortable life “on interest” only when you have a solid capital and practical experience in the field of investment. Getting both takes time, patience and discipline!
Calculation for a constant return on investment
Fixed income on the market is guaranteed by just a couple of conservative instruments! For example, highly reliable bonds or deposits in a state bank (often even nominal).
In all other cases, income is a variable and floating value. And this point must be taken into account when compiling the LFP. Do not start from the maximum possible profitability! Always aim for the average.
LFP is not implemented in practice
One of the most common mistakes! LFP is a map-route to achieve your dreams. The plan is absolutely useless if you just print it out and hang it on the wall. Every day you need to take tiny steps towards intermediate "destinations".
Imagine that you have compiled an excellent route for a three-day ascent to a mountain peak. We bought everything we needed, packed a backpack, but never left the house. As a result, the cherished intention is as far away as before.
It's the same with LFP. If the plan is to "increase monthly income by 20%", then you need to look for another job or create your own business. If you planned to set aside 10,000 rubles for investments every month, then you will have to do this not “when you remember”, but every month.
Otherwise, the plan will remain a beautiful sample table in Excel.
Summing up
It's actually not that hard to come up with a basic plan. It is much more difficult to strictly adhere to it for years. However, I still recommend showing your first LFP to a professional!
Unfortunately, any plan is not a panacea and not a "secret tool" of millionaires. This is just the first step towards financial freedom. Tested on myself: it really helps to take personal funds under control and achieve goals without spraying on nonsense. Only in this way you can avoid blunders and immediately move in the right direction. After all, the most important thing in this life is time. Is not it?
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Successful business development largely depends on adequate planning. This is especially true for enterprises that are new market players. It is important for their founders, firstly, to competently occupy their niche, secondly, to form a sustainable business model, and thirdly, to ensure the investment attractiveness of the company, as well as high credit ratings. All these problems can be solved by competent planning. How is the financial plan prepared? What is the nature of this source?
Main components of a financial plan
A financial plan is a set of documents. In general, it consists of:
Forecast on sales volumes;
Balance of revenue and expenses;
Schedule of estimated profitability;
Accounting balance.
Of course, in the methodology of individual enterprises, the principles for the formation of the corresponding source may differ significantly from this scheme. But it is widespread among Russian businesses. Let us consider the specifics of each of the noted components of the financial plan in more detail.
Sales forecast
This document involves, in fact, a study of the market segment in which the company operates and the subsequent determination of the size of its share, which, most likely, the company will be able to occupy. As a rule, the financial plan in this part is drawn up for several years in advance - for example, for 3 years. At the same time, the expected growth for the first year can be calculated on a monthly basis (since in this case, forecasts based on a study of current factors are likely to be very close to reality).
Estimated Profit Graph
The financial plan is largely related to forecasts. If the relevant sales document is intended to help shape revenue expectations, then the source under consideration is directly related to profit. That is, when it is calculated, forecasts for costs are also made.
Balance of revenue and expenses
This document is important from the point of view that the leaders of the company need to know which expenses and at what point in time will assume a return within the framework of current activities, and which will pay for themselves over time. Another function of the balance of revenue and expenses is to estimate the amount of costs necessary to achieve the required turnover (for example, sufficient in terms of the company's current obligations - credit, management, etc.). As a rule, the document in question is supplemented by a table that reflects the ratio of costs and income.
There is an official name for the corresponding component of the financial plan - "Profit and Loss Statement". He is part of financial statements, which the company must provide in government bodies Therefore, its formation is mandatory for many businesses. At the same time, the corresponding document is the most important in terms of drawing up a financial plan. It contains valuable and informative information that reflects the effectiveness of the company's business model.
Of course, the development of a company's financial plan may involve the formation of a balance of revenue and expenses in forms that differ significantly from the "Profit and Loss Statement". It can be more detailed or, conversely, less complex. However, the official form of the Profit and Loss Statement is considered by many entrepreneurs to be quite logical and informative, and therefore is widely used in business.
Balance sheet
This document, like the previous one, belongs to the official category. The enterprise must form it not only as part of the financial plan, but also as a necessary element of reporting provided to the Federal Tax Service. However, the balance sheet important element forecasting. Based on the figures that it reflects, management can analyze how effectively the company worked in the reporting period, and adjust the business development strategy if necessary. The balance sheet is one of the most detailed documents characterizing the activities of the enterprise. Through it, financial accounting is carried out. The chart of accounts of the balance sheet is an obligatory component of the activities of specialists of the relevant departments of the company dealing with monetary issues.
The document in question, as a rule, is created by enterprises without any special differences from the official form approved by the laws of the Russian Federation (although, as in the case of the profit and loss balance, the company has the right to determine its own criteria for the formation of the corresponding source). The legislator of the Russian Federation, therefore, has developed a fairly well-thought-out, logical and informative structure of the balance sheet, and companies are willing to use it not only in fulfilling reporting obligations, but also in the process of creating internal corporate financial plans.
It can be noted that the use of forms approved by the state is mandatory for budget institutions. So, every year, the relevant organizations, as a rule, are given the task of submitting a plan of financial and economic activity to a higher authority. It can be considered as an analogue of the corresponding document for private enterprises. Moreover, many businesses form a financial and economic plan based on the structure of the noted source developed by the state. But if reporting procedures do not require it, a private enterprise has the right to create documents according to its own concept.
So, the creation of a financial plan for the development of a corporation involves, first of all, the formation of four key sources. What is the best order to develop them? Let's try to form step by step instructions, which reflects the algorithm for creating a financial plan recommended by market experts.
Step-by-step instructions for drawing up a financial plan: main steps
Many experts in the field corporate governance consider it right, at the same time, to start work not with the formation of any of the noted documents, but with another source - a funding strategy. It thus precedes the creation of any of the four components of the plan noted above, which in question.
The next stage, within which a financial plan can be drawn up, is the development of a sales forecast. The fact is that the calculation of revenue is a procedure based on information that is more accessible in most cases than an analysis of possible costs. As a rule, a new enterprise enters an already existing market segment, the dynamics of demand in which is generally known to all players. From here you can calculate what sales volumes can be in relation to certain terms.
Once you have your sales forecast, it's time to work on the estimated profitability chart. Thus, the organization's management will have to work to identify, in turn, the likely dynamics of the organization's costs in relation to a particular period.
Having at your disposal revenue and profit forecasts, as well as actual figures reflecting commercial activities, you can form a balance sheet that takes into account relevant indicators. This document is in more statistical, it fixes the already completed financial transactions. A similar function is performed by the balance sheet. Most often, it is formed simultaneously with the document in which profits and losses are recorded - largely because both of them together form, as we noted above, the financial statements that the enterprise must submit to government agencies.
Stages of drawing up a financial plan
So, the preparation of a financial plan can be carried out within the following main stages:
1. Defining a funding strategy.
2. Formation of revenue forecasts.
3. Determining the dynamics of costs.
4. Fixing the results of the company's activities in the balance of revenue and costs ("Profit and Loss Statement"), as well as in the balance sheet.
Of course, the noted structure of the formation of the source in question may be different. Thus, it is logical to assume that the financial plan of an organization that has just entered the market will not initially contain data on profits and losses, as well as a balance sheet. Relevant components will be added to it later.
It may well be that the balance, reflecting revenues and costs, will be supplemented not only by statistical, but also by forecast data. An organization's financial plan may suggest such a need if, again, the firm is just entering the market, and investors have a need to obtain as much detail as possible about its business model.
What information should be reflected in the marked sources - documents that form the financial plan of the organization? Let's consider the aspect concerning its content.
What should a financial plan include? As we noted above, it can consist of four key sources. They are also complemented by a funding strategy. Let us consider the content of the plan in relation to the sources, the essence of which we have considered above.
The financial plan of the enterprise is recommended to start with a strategy for acquiring and distributing the necessary capital. What should be included in this document? Its recommended structure assumes the presence of the following main sections in it:
Determining sources of revenue;
Formation of the spectrum of necessary expenses;
Identification of channels for attracting additional capital (through loans, investments);
Formation of key principles of interaction with the state (selection and justification of the organizational and legal form, taxation regime).
The revenue forecast involves the preparation of a document that will reflect:
Identification of key profit channels (for example, the sale of specific types of goods that are in the highest demand);
Identification of factors affecting sales dynamics (season, currency fluctuations, regulators' policy);
Formation of a forecast for revenue in relation to certain periods (month, quarter, year and other periods).
The graph showing the dynamics of expenses suggests a very similar structure:
Identification of key cost items (for example, wages, raw materials, transport services);
Identification of factors affecting costs;
Formation of forecasts for expenses.
In turn, the balance of revenue and costs, as well as financial statements, have a rather complex structure (if they are based on forms approved by the state). The purpose of these documents is to identify how effective the current business model of the organization is, to determine how profitable the company is in a particular billing period.
It is possible that the management of the enterprise will decide to use the official forms of the profit and loss account, as well as the balance sheet. In this case, to fill them out, you will need access to the records of the movement of capital in the company, to the postings. So, you will need to study the chart of accounts accounting financial and economic activities of the company. The data for filling in the marked forms is mainly taken from there. Chart of accounts financial activities must, of course, be correctly composed. This is guaranteed by its standardization - at the level of federal legal acts.
What to look for when drawing up a financial plan?
So, we have studied what a financial plan of an enterprise is and in accordance with what algorithms it can be developed. Let us now consider the key nuances that are useful to pay attention to when compiling the components of this source.
The first thing to note is that the financial plan is one of many documents that are drawn up in order to optimize the organization's development model. It can complement other sources. Most often, it is an integral component, and at the same time a very important, larger document - a business plan. Its main function in this case is to form an idea among the founders of the organization, investors or creditors about the prospects for the commercial activities of a particular enterprise. The financial activity plan, as we noted above, will include data on revenue, costs, as well as statistical data reflecting them. All this information is needed by business founders and their partners.
The main thing is to reflect in the document what will be the main factors affecting the receipt and distribution of capital, how to recognize them in a timely manner and adapt the business model of the enterprise to possible changes. The plan of the financial and economic activity of the company allows you to determine the so-called "break-even point" of the company - the moment from which the revenue consistently exceeds the costs (in another interpretation - when the return of the established part of the investment is made).
Forecasting income and expenses is usually formed for several years - most often for 3 years. As we noted above, in the first year, you can distribute the corresponding indicators monthly. In the structure of income and expenses, those that are characterized by high stability or, conversely, volatility can be additionally distinguished. For example, with regard to the costs of the first type, it could be rent in accordance with the contract. Volatile spending can be associated with the import of goods from abroad. Their value may change due to changes in the exchange rate of the ruble in the foreign exchange market.
When drawing up a financial plan, one should pay closer attention, according to some researchers, not to the production aspect, but to the marketing one. A company can develop a completely unique, technological product, but the company's business model will be ineffective due to an insufficiently capacious sales market for the corresponding product at the prices that are included in the business plan as guaranteeing the profitability of the enterprise. The solution of the corresponding problem may involve not only financial analysis, but also the use, as an option, of sociological methods - surveys, communication with potential consumers on the Internet in order to identify their buying sentiment, demand potential.
In principle, when drawing up an algorithm for obtaining and distributing capital, one should not neglect promotion costs that are not directly related to production costs. It may well turn out that in order to occupy the necessary niche in the market, the enterprise will need to invest heavily in advertising - so that more target consumers know about the brand.
When drawing up financial plans, it is necessary to act in conditions of access to relevant sources of legislation. You need to be aware of the latest legal news. The legislator can quite significantly change, relatively speaking, the tax rate. The task of the company's management is to find out about this in time and make the necessary adjustments to the financial plan.
Also, you should not plan savings on staff salaries. Initially, it is recommended that, if possible, it is recommended to budget for the company, firstly, the size of the staff, which is larger than may be required, based on profitability criteria, in order to increase the overall productivity of the enterprise, if necessary. short time, and secondly, a sufficiently high value labor compensation. The organization must be attractive to the best specialists of the market segment in which it operates.
Who should develop the financial plan?
Who develops the organization's financial plans? In practice, these can be both ordinary specialists with necessary competencies as well as managers. It is quite possible that the development of the corresponding plan will be outsourced. Which of the noted mechanisms for compiling an algorithm for obtaining and distributing capital is the most effective?
There are many points of view on this matter. Some researchers believe that the long-term part of the plan should be trusted to those employees who have access to strategic information. For example, this may be information about the specifics of the company's loans. Most likely, such employees will be people from among the top managers of the enterprise. In turn, the monthly periods of financial plans, perhaps, can best be worked out by specialists who understand in detail the specifics of specific production sites. They will not need to know information of a strategic nature. But their competence in terms of detailing business processes will probably be even higher than that of the company's management.
What is better - when the financial plan of the institution is developed by full-time specialists, or a scheme in which the solution of the corresponding task is outsourced? It depends on many factors. Many enterprises do not trust outsourcing schemes too much due to the use of secret technologies, drawings, and materials in production. Those firms that see their competitive advantage not in unique developments, but in an effective business model, in many cases they willingly agree to such cooperation mechanisms. Thus, competent, experienced specialists are involved in the preparation of business plans - albeit freelance ones. So, if these are accountants, then they, in particular, will always be able to properly take into account the chart of accounts of financial and economic activities, with which an unprepared specialist may have problems.
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